What happened
EV maker Rivian Automotive (NASDAQ: RIVN) has been on investors' radar this week for the wrong reason. While past performance isn't necessarily indicative of future results, the drag Rivian stock has had on the first-quarter earnings reported by Ford and then Amazon may have turned off some Rivian investors. As of 12:42 p.m. ET, Rivian shares were near their lows of the day, down 2.6%.
So what
The big news wasn't today's decline, though. Rivian shares are down 69% year to date, and most of that came during the first three months of 2022. That meant that Ford and Amazon, with large stakes in the electric vehicle start-up, had to adjust the value of the Rivian holdings on their books in what's known as mark-to-market accounting.
Image source: Rivian Automotive.
Now what
Ford was forced to report a $3.1 billion loss in its first quarter after including a mark-to-market loss of $5.4 billion from its Rivian holding. Amazon's 18% ownership of Rivian led to a $7.6 billion pre-tax valuation loss that was a major contributor to the e-commerce retailer's first quarterly loss since 2015.
In the first quarter alone, Rivian shares were more than cut in half. That came as the company cut its 2022 production guidance to 25,000 vehicles due to supply chain limitations. It also was forced to walk back an attempted price hike for vehicles that had already been reserved as it tried to cover increased raw material costs.
Of course, all of that is in the past, and today's move is really just due to sentiment as Rivian remains in the headlines for the wrong reason. But Rivian investors will want to really pay attention to what the company says when it reports its own first-quarter results on May 11 after the market closes.
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